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Stock Markets Tumble on Dire U.S. Warning: Live Updates Stock Markets Tumble on Dire U.S. Warning: Live Updates
(about 2 hours later)
Global stock markets fell broadly on Wednesday as investors digested a steady drip of worrying news about the economic ramifications of the global coronavirus outbreak. Global stock markets fell broadly on Wednesday as investors digested a steady drip of worrying news about the economic ramifications of the coronavirus pandemic.
London and Paris stocks opened nearly 4 percent lower, following similar drops in Asia. Futures markets predicted that Wall Street would open lower later on Wednesday. London and Paris stocks were trading 2 to 4 percent lower, following similar drops in Asia. Futures markets predicted that Wall Street would open lower on Wednesday. And Bank stocks in the Britain fell after several large lenders announced that they would cancel dividends.
While the panic of recent weeks appeared to have subsided, numerous signs pointed to glum prospects for a quick solution to the coronavirus outbreak. After Wall Street’s close on Tuesday, President Trump said at a news conference that the United States would face “a very painful, very, very painful two weeks.” U.S. government scientists projected that the outbreak could kill up to 240,000 Americans. While the panic of recent weeks appeared to have subsided, numerous signs pointed to glum prospects for a quick solution to the coronavirus outbreak. After Wall Street’s close on Tuesday, President Trump said at a news conference that the United States would face a “very, very painful two weeks.” U.S. government scientists projected that the outbreak could kill up to 240,000 people in the country.
Prices rose for long-term U.S. Treasury bonds, a traditional investment safe haven, as did gold futures. Oil prices, a proxy for world economic growth prospects, fell, with Brent crude, the global benchmark, down more than 4 percent. Prices rose for long-term U.S. Treasury bonds, a traditional investment haven, as did gold futures. Oil prices gained slightly.
Tokyo’s Nikkei 225 index fell 4.5 percent on Wednesday, and the Kospi index in South Korea fell 3.9 percent. The Hang Seng index in Hong Kong dropped 2.2 percent. The Shanghai Composite index in mainland China fell 0.6 percent. Tokyo’s Nikkei 225 index fell 4.5 percent on Wednesday, and the Kospi index in South Korea fell 3.9 percent. The Hang Seng index in Hong Kong dropped 2.2 percent. The Shanghai Composite index in mainland China fell 0.6 percent.
In London, the FTSE 100 index was down 3.9 percent after the open. The CAC 40 index in Paris was down 3.8 percent, and Germany’s DAX index was down 3.3 percent.
March was a month of head-snapping turns in financial markets: The S&P 500 suffered its worst one-day drop since 1987 before later recording its best three-day run since 1933, oil prices crashed, interest rates plunged and Wall Street’s more esoteric markets seized up.March was a month of head-snapping turns in financial markets: The S&P 500 suffered its worst one-day drop since 1987 before later recording its best three-day run since 1933, oil prices crashed, interest rates plunged and Wall Street’s more esoteric markets seized up.
The roller coaster came as investors found themselves overwhelmed by a shutdown of the world economy. Early in the month, the record-breaking, 11-year bull market ended, and trading was halted more than once to prevent a crash.The roller coaster came as investors found themselves overwhelmed by a shutdown of the world economy. Early in the month, the record-breaking, 11-year bull market ended, and trading was halted more than once to prevent a crash.
An enormous fiscal and policy response at the end of the month helped undo some of the worst of the damage. The S&P 500 recouped more than half of its losses in the final week of the month after lawmakers passed a $2 trillion spending package and the Federal Reserve said it would buy an unlimited amount of government-backed debt to keep markets functioning.An enormous fiscal and policy response at the end of the month helped undo some of the worst of the damage. The S&P 500 recouped more than half of its losses in the final week of the month after lawmakers passed a $2 trillion spending package and the Federal Reserve said it would buy an unlimited amount of government-backed debt to keep markets functioning.
But even as stocks rebounded well off their lowest point, March was the worst month for the S&P 500 since October 2008, when investors feared a collapse of the economy in the wake of the global financial crisis. The S&P 500 fell 12.5 percent this month. The index is down 20 percent so far this year. But even as stocks rebounded well off their lowest point, March was the worst month for the S&P 500 since October 2008, when investors feared a collapse of the economy amid the global financial crisis. The S&P 500 fell 12.5 percent this month and is down 20 percent this year.
On Tuesday, stocks fell 1.6 percent.On Tuesday, stocks fell 1.6 percent.
Calmer markets do not mean the worst is over. As consumers stay home and factories shut down, millions of workers have lost their jobs. Economic data showing the scale of the damage has only just begun to roll in, and Wall Street analysts continue to downgrade expectations for the economy. Calmer markets do not mean the worst is over. As people stay home and factories shut down, millions of workers have lost their jobs. Economic data showing the scale of the damage has only just begun to roll in, and Wall Street analysts continue to downgrade expectations for the economy.
Fears are growing that the downturn gripping the global economy could be far more punishing and long lasting than initially feared — potentially enduring into next year and even beyond.
The pandemic is above all a public health emergency. So long as human interaction remains dangerous, business cannot responsibly return to normal. And what was normal before may not be anymore. People may be less inclined to jam into crowded restaurants and concert halls even after the virus is contained.
The abrupt halt of commercial activity threatens to impose economic pain so profound and enduring in every region of the world at once that recovery could take years. The losses to companies, many already saturated with debt, risk setting off a financial crisis of cataclysmic proportions.
“I feel like the 2008 financial crisis was just a dry run for this,” said Kenneth S. Rogoff, a Harvard economist and co-author of a history of financial crises, “This Time Is Different: Eight Centuries of Financial Folly.”
“This is already shaping up as the deepest dive on record for the global economy for over 100 years,” he said. “Everything depends on how long it lasts, but if this goes on for a long time, it’s certainly going to be the mother of all financial crises.”
The stakes are high, and so are the prices. Wholesale costs for N95 respirators, a crucial type of mask for protecting medical workers, have quintupled. Trans-Pacific airfreight charges have tripled.The stakes are high, and so are the prices. Wholesale costs for N95 respirators, a crucial type of mask for protecting medical workers, have quintupled. Trans-Pacific airfreight charges have tripled.
Global desperation to protect front-line medical workers battling the coronavirus epidemic has spurred a mad global scramble for masks and other protective gear. Global desperation to protect front-line medical workers battling the coronavirus epidemic has spurred a global scramble for masks and other protective gear.
The White House announced over the weekend that it had organized 22 flights to airlift personal protection equipment. They are aimed at resupplying hospitals that are within 72 hours of running out of protection equipment, said Gregory Forrester, the chief executive of National Voluntary Organizations Active in Disaster. The White House said over the weekend that it had organized 22 flights to airlift personal protection equipment. The aim is to resupply hospitals that are within 72 hours of running out of protection equipment, said Gregory Forrester, the chief executive of National Voluntary Organizations Active in Disaster.
“If any one of these planes don’t take off,” Mr. Forrester said, “that’s going to be an issue.” “If any one of these planes don’t take off,” he said, “that’s going to be an issue.”
China has become a major part of the solution. Already a giant in mask manufacturing, it has ramped up production to nearly 12 times its earlier level. It was a huge mobilization effort that involved redesigning freight train routes and sending large numbers of workers across the country in sealed buses. China has become a major part of the solution. Already a giant in mask manufacturing, it has ramped up production to nearly 12 times its earlier level. The huge mobilization effort has involved redesigning freight train routes and sending large numbers of workers across the country in sealed buses.
The Chinese government has encouraged global deals, but buying and selling masks is no easy feat. Traders, some just weeks into their new but unstable careers, have to navigate confusion, fraud attempts, byzantine customs laws and other barriers.The Chinese government has encouraged global deals, but buying and selling masks is no easy feat. Traders, some just weeks into their new but unstable careers, have to navigate confusion, fraud attempts, byzantine customs laws and other barriers.
Workers at Whole Foods held a sickout on Tuesday seeking to pressure the company to provide paid leave for those who choose to quarantine and to double the pay of those who work during the pandemic.
“Today, Whole Foods workers across the country staged a successful sickout,” said a statement from the Whole Worker’s National Organizing Committee, the group that organized the protest. “This is only the beginning, and we will be following this sickout with further action.”
It was unclear how many workers participated. The company referred to the protesters as a “small but vocal group” and said the action had not affected its operations. The company said that it had raised pay $2 per hour through the end of April and was providing two weeks of paid sick leave for workers placed into quarantine or diagnosed with the coronavirus.
Japan’s factory activity in March slowed to its lowest rate in a decade and its manufacturers are increasingly pessimistic about the state of the country’s economy, data showed on Wednesday, in the latest indications of the pressure that the coronavirus is putting on Japanese businesses.Japan’s factory activity in March slowed to its lowest rate in a decade and its manufacturers are increasingly pessimistic about the state of the country’s economy, data showed on Wednesday, in the latest indications of the pressure that the coronavirus is putting on Japanese businesses.
The country’s economy was already on the brink of a technical recession — two consecutive quarters of contraction — following a 7.1 percent drop in economic output in the final three months of last year. The country’s economy was already on the brink of a technical recession — two consecutive quarters of contraction — after an 7.1 percent drop in economic output in the final three months of last year.
But a gauge of factory output, known as the purchasing manager’s index, fell to 44.8 in a monthly survey by Jibun Bank and IHS Markit. A reading less than 50 indicates economic contraction. But a gauge of factory output, known as the purchasing manager’s index, fell to 44.8 in a monthly survey by Jibun Bank and IHS Markit. A reading of less than 50 indicates economic contraction.
The reading was the lowest level since 2009, when the country was grappling with the impact of the global financial crisis. The reading was the lowest level since 2009, when the country was grappling with the effects of the global financial crisis.
Separately, Japanese manufacturers’ concerns about the course of the economy over the coming three months have sharpened dramatically, turning negative for the first time since 2011, in the aftermath of the Fukushima nuclear disaster, according to a central bank survey of business conditions, known as the Tankan, that was released on Wednesday. Japanese manufacturers’ concerns about the course of the economy over the coming three months have also sharpened significantly, turning negative for the first time since 2011, in the aftermath of the Fukushima nuclear disaster, according to a central bank survey of business conditions, known as the Tankan, that was released on Wednesday.
So far, Japan has managed to limit the spread of the coronavirus without resorting to the kinds of strict measures that have caused widespread economic shutdowns in the United States, China and Europe.So far, Japan has managed to limit the spread of the coronavirus without resorting to the kinds of strict measures that have caused widespread economic shutdowns in the United States, China and Europe.
But plummeting demand from those areas and disruptions to global supply chains have nevertheless driven Japanese manufacturers to cut back production. But plummeting demand from those areas and disruptions to global supply chains have driven Japanese manufacturers to cut back production.
The Japanese automaker Subaru announced on Wednesday it was temporarily suspending activity in some of its factories at home and in the United States. The announcement followed similar decisions by other automakers, including Toyota, which announced last month that it would pause work at some domestic facilities. The Japanese automaker Subaru said on Wednesday that it was temporarily suspending activity in some of its factories at home and in the United States. The announcement followed similar decisions by other automakers, including Toyota, which said last month that it would pause work at some domestic facilities.
Friends of Ren Zhiqiang, a well-known former property mogul and Communist Party member in China, say he has disappeared after writing an essay critical of the Chinese government’s response to the coronavirus outbreak.Friends of Ren Zhiqiang, a well-known former property mogul and Communist Party member in China, say he has disappeared after writing an essay critical of the Chinese government’s response to the coronavirus outbreak.
The essay, which was shared widely within private internet message groups, never named Xi Jinping, China’s top leader, but it faulted the actions of a power-hungry “clown” and the Communist Party’s strict limits on free speech. It declared that the party should “wake up from ignorance” and oust the leaders holding it back, just as it did with the leaders known as the “Gang of Four” in 1976, ending the turmoil of the Cultural Revolution. The essay, which was shared widely within private internet message groups, never named Xi Jinping, China’s top leader, but it faulted the actions of a power-hungry “clown” and the Communist Party’s strict limits on free speech. It said the party should “wake up from ignorance” and oust the leaders holding it back, just as it did with the leaders known as the “Gang of Four” in 1976, ending the turmoil of the Cultural Revolution.
The disappearance of Mr. Ren, a longtime critic of the Chinese government who amassed nearly 38 million Weibo followers before his account was deleted in 2016, adds to fears that China is sliding backward and abandoning the reforms that saved it from extreme poverty and international isolation. His fate suggests China’s leadership won’t tolerate criticism of its actions during the outbreak. The disappearance of Mr. Ren, a longtime critic of the Chinese government who amassed nearly 38 million Weibo followers before his account was deleted in 2016, adds to fears that China is abandoning the reforms that saved it from extreme poverty and international isolation. His fate suggests that China’s leadership won’t tolerate criticism of its actions during the outbreak.
For 15 years, the U.S. government has been pressing airlines to prepare for a possible pandemic by collecting passengers’ contact information so that public health authorities could track down people exposed to a contagious virus.For 15 years, the U.S. government has been pressing airlines to prepare for a possible pandemic by collecting passengers’ contact information so that public health authorities could track down people exposed to a contagious virus.
The airlines have repeatedly refused, even this month as the coronavirus proliferated across the United States. Now the country is paying a price. The airlines have repeatedly refused, even last month as the coronavirus proliferated across the United States.
As the coronavirus spread into the United States earlier this year, the federal government was not able to get in touch with or monitor airline passengers who might have been exposed to the disease or were bringing it into new communities. As the coronavirus spread into the United States this year, the federal government was not able to get in touch with or monitor airline passengers who might have been exposed to the disease or were bringing it into new communities.
Airline executives and lobbyists have protested that it would be expensive and time-consuming for them to start collecting basic information like email addresses and phone numbers for all passengers.Airline executives and lobbyists have protested that it would be expensive and time-consuming for them to start collecting basic information like email addresses and phone numbers for all passengers.
Reporting was contributed by Ben Dooley, Li Yuan, Keith Bradsher, Carlos Tejada and Daniel Victor. Banks in Britain, including Barclays, HSBC and RBS, said they would not pay dividends or carry out share buybacks this year. The supervisory arm of the Bank of England, which had requested the move, also encouraged the banks not to award cash bonuses to senior staff members this year. The European Central Bank has issued a similar request to eurozone banks.
Brooks Brothers said on Tuesday that it would use its manufacturing facilities in New York, North Carolina and Massachusetts to make masks and gowns for health care workers.
Tyson Foods said it would pay approximately $60 million in bonuses to 116,000 front-line workers and truckers in the United States. Eligible employees will receive a $500 bonus, payable in the first week of July.
Reporting was contributed by Ben Dooley, Peter S. Goodman, Li Yuan, Keith Bradsher, Noam Scheiber, Amie Tsang, Carlos Tejada, Kevin Granville and Daniel Victor.